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Biotech / Medical : IVAX Insider Trading -- Ignore unavailable to you. Want to Upgrade?

To: flickerful who wrote (414)	1/15/1998 8:37:00 AM
From: 5,17,37,5,101,...	Respond to of 756

Why do ask if there is a big buyer? What do you sense? In the game that Frost plays (and others) an offer will most likely arise but I doubt if it will be a serious offer -- a tool to jerk up the price of the shares, IMHO. In order to achieve a higher share price, Frost must squeeze the fraudulent excesses from SG&A and begin having drugs approved now. Simple isn't it. But it isn't being done. I read that article about Napro, but wasn't excited about it. Neither was the market which tanked Ivax to the tune of about 6%. Ivax was supposed to be working on "novel" delivery systems for administration of paclitaxel; what are they doing? I'm not sure if they know. Jackson

To: flickerful who wrote (414)	1/15/1998 9:10:00 AM
From: 5,17,37,5,101,...	Read Replies (1) \| Respond to of 756

Here is an excerpt from an Oppenheimer report dated 10/1/97. Investment Conclusion IVAX Corp. warned that a lack of new drugs and weakness in its generic drug distribution business are likely to contribute to a greater-than-expected third-quarter loss. We believe IVAX's business could continue deteriorating amid a lack of blockbuster generic drugs set to lose patent protection during the next two years, increased competition from wholesalers, and management turmoil. On an operating basis, IVAX shares, which trade at 36x our newly lowered 1998 earnings estimate of $0.30 per share, are fully valued. On a takeover basis, IVAX is probably worth no more than $7.60 per share, comprising $5.10 for the company's generic drug business, and $2.50 for its research and development. We maintain a Market Perform rating. Lack of approvals hurts third-quarter results. IVAX said it expects to report a third-quarter loss from continuing operations that exceeds the second quarter's loss of $0.43 per share. We had projected a loss of $0.15 per share. IVAX attributed the worse-than-expected results to a lack of drug approvals this year. IVAX has won approval for four generic drugs in 1997, but none are significant. In addition, IVAX's Zenith Goldline unit, a distributor of generic drugs, continues to suffer at the hands of large pharmaceutical wholesalers, which last year increased their presence in the generic drug market. As a result, we are increasing our projected 1997 loss to $1.33 per share from $0.77. We also are reducing our 1998 earnings estimate to $0.30 per share from $0.55. IVAX isn't giving analysts guidance on earnings. Business likely to continue declining. We believe IVAX's generic drug business could continue deteriorating based on a lack of blockbuster drugs set to lose patent protection in the next two years. Through the middle of 1999, drugs with annual sales of about $2 billion are set to lose patent protection. That compares with $1.4 billion in the first half of 1997. In addition, we believe pharmaceutical wholesalers will continue to take business from IVAX's generic drug distribution unit, Zenith Goldline. Furthermore, IVAX management remains in turmoil. In July, the executive brought in to turn IVAX around, Robert Strauss, quit, citing differences with the company's chairman. In addition, four directors have chosen not to seek re-election to IVAX's board. We believe IVAX shares are trading above their real value on both a takeover and operating basis. Watson Pharmaceutical Inc.'s (WPI-NYSE $59, Outperform) September agreement to buy a generic drug business similar to IVAX's suggests the market may overvalue IVAX. Watson plans to pay about 0.5x revenue for a Hoechst Marion Roussel generic drug business. Even if we double that multiple to 1x revenue and apply it to IVAX's expected 1997 revenue of $625 million, we get a valuation for IVAX's generic drug business of $5.10 per share. IVAX's proprietary drugs, most notably its cancer drug paclitaxel, probably are worth an additional $2.50 per share if we assume they have potential sales of $100 million and are worth a 3x multiple on revenue. That leaves us with total value of $7.60 per share. On an operational basis, IVAX shares probably are worth no more than $6.30, or 21x estimate 1998 earnings of $0.30 per share. We maintain a Market Perform rating